Credit ratings agency Moody's says it will not lower Poland's all-important credit rating, even if the country undergoes a recession this year.

Moody's analyst Kenneth Orchard told Reuters that he expected the CEE's largest economy to grow this year, despite the global downturn, but that GDP expansion would be under 2% and closer to zero % than 2%.

Polish PM, Donald Tusk, said earlier this week that GDP growth would be no worse than 1.7%. Poland is currently rated as A2 with a stable outlook.

Neighbouring Hungary is forecast to see sharply negative growth in 2009 and the Czech economy could also see some contraction.

But, while Moody's Orchard, believes Poland will escape an outright contraction during the year, he believes the Polish government's forecast is overly optimistic.

'That government's worst case scenario sounds more like a central scenario or even a slightly optimistic scenario,' he said.

'Even assuming Poland finds itself in a recession in 2009, that is (it) has two consecutive quarters of negative growth, it would not put pressure on Poland's rating as we concentrate more on the medium term perspective.'

Credit ratings matter a great deal as they affect the price a country has to pay to raise credit on international markets - the lower the rating, the more risky the country is seen to be and so the more it has to pay to raise credit.

Robin Bowman